SAP Bids $4.3 Billion To Acquire B2B Cloud Application Developer Ariba

SAP is acquiring Ariba, a developer of cloud-based business commerce network software, for $4.3 billion. The acquisition is SAP's latest move to expand beyond its traditional ERP on-premise application roots into broader areas including cloud computing, mobile computing and business analytics.

SAP said Tuesday that Ariba's board of directors had voted to accept SAP's $45-per-share offer, a price SAP said marked a 20 percent premium over the stock's May 21 closing price. SAP will fund the acquisition from free cash and a 2.4-billion Euro term loan facility.

SAP said it expected to close the deal in the third quarter of calendar 2012, subject to Ariba stockholder approval and other closing conditions.

Sunnyvale, Calif.-based Ariba develops cloud-based, business-to-business commerce applications. SAP said the acquisition would establish it as "the leading business network" by adding collaborative commerce applications to its product lineup.

The move closely mirrors SAP's $3.4 billion acquisition of SuccessFactors, a developer of cloud-based human capital management applications. That deal was announced in December and completed in February.

SAP has been developing a number of cloud applications in-house, including its Business ByDesign application set for mid-market customers and cloud applications for big companies, the latter including the SAP Financials OnDemand and SAP Social Customer Engagement OnDemand that were unveiled at the company's Sapphire Now conference in Orlando last week.

But the giant software company is also counting on its acquisition of SuccessFactors -- and now Ariba -- to accelerate the vendor's move into the cloud.

"Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution," the company said in a statement attributed to co-CEOs Bill McDermott and Jim Hagemann Snabe. "The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP's growth in the cloud."

Ariba has $444 million in annual revenue and recorded 38.5 percent growth in 2011. The company has 2,600 employees. SAP said the current Ariba management team would continue to lead the company, which will operate as an independent SAP business unit under the Ariba name.